Hey Google! So, What's Next for Publishers?

Google’s privacy gauntlet throwdown this week might have been expected, but that doesn’t make it any less of a confusing shake-up for the industry. For publishers, there are benefits to the ongoing march toward a more privacy-focused future. But concerns linger over Google’s ability to thwart competitors, increase its dominance and fragment the open internet, not to mention the slim buyer incentive to try non-Google alternatives. Publishers had been expecting Google’s announcement that it would not support alternative identifiers—hashed email addresses popularized by The Trade Desk and other independent ad-tech vendors—in its ad stack. “Google won't use other people's methods, no surprise there,” one publishing executive, speaking anonymously, told Adweek. Meanwhile, federated learning of cohorts (FLoCs) will support Google’s ad stack, including its demand-side platform DV360, and ad programs Google Ads and AdSense. Google facilitates about 40% of the money that flows from advertisers to publishers on the open internet, according to digital consultancy Jounce Media. Last year, Google accounted for 52% of the global digital ad spending of $292 billion. watch: How Cookies Work and Why They’re Going Away Much has been written about publishers’ move to build more diversified revenue streams, drive direct connections with readers and advertisers, beef up first-party data platforms and reduce reliance on the open exchange to regain control of their data and inventory. Google's clarification strengthens this position. As publishers become the only parties able to build audience cohorts deployable across platforms, there should be sunnier skies ahead. But there are growing unanswered questions about the details leading to confusion in the market. "I’ve had an email from one of my vendors overnight claiming that IDs won’t be available in the bid stream," said a second publishing executive. Google 'turtle-shelled itself' from the open web At a publisher-focused webinar hosted by Google on Thursday, timed to coordinate with the announcement, there was a revealing slide stating "Tracking individual users without their permission should be blocked," according to publisher sources who attended. "What’s clear is that Google will not make it impossible for third parties to continue tracking individual users," said Struan Bartlett, CEO of aggregator publisher and tech company NewsNow. "What’s unclear is the level to which Google is prepared to exploit its browser market dominance, engineering Chrome to steer users away from consenting to being tracked and towards participation in the alternative technologies it's proposing to use." “Google may have just turtle-shelled itself and retreated from the open web a bit,” said a third publishing executive. “They'll leave that other identity stuff to the other demand-side platforms and supply-side platforms.” Buyer demand for alternatives is slim There are alternatives outside of Google that could potentially give independent ad tech a boost as the existing ID solutions will be able to offer targeting at a level Google cannot offer. But there's not much appetite, for now, from buyers. "Addressable IDs don’t appear, from where I sit, to have been picked up with as much vigor as on the supply side," said the second publishing executive. "I’ve had two agencies ask what solutions are available to them on our inventory. We’re starting to see LiveRamp work closer with advertisers and run tests across inventory but these are few and far between." How much the products developed by Privacy Sandbox will be baked into the Chrome browser is one of the unanswered questions and could tip the scales in Google's favor. read more: Inside Google Chrome’s Privacy Sandbox Proposals "Over time, buyers will have strong incentives to go the Google way, rather than invest in targeting audiences composed of individual users," said Bartlett. "Any technology baked into the browser, or that is a common standard used by every website, promises to provide much richer information about users than user tracking ever could." Will publisher first-party data trump FLoCs? For those publishers reliant on the open marketplace, the reality they have been living with for years is not ideal. It’s pricey for publishers to strike deals with agencies to trade on first-party data, and few have found effective scalable solutions. Middlemen take a slice out of every targeted advertising transaction. “The question is whether we see an increase in average CPM rates and fill,” said Bartlett, adding that eliminating disintermediation would force agencies to use contextual and publishers’ first-party data and FLoCs. “That could well improve publishers’ rates and make it easier, not harder, for publishers to strike deals with agencies.” read more: FLOC targeting forms part of Google Chrome's Privacy Sandbox initiative “Yes, advertisers can use the [Google] cohorts,” said the second publisher. “But for publishers who have spent time investing in first-party, I think we will be able to offer more efficient targeting than FLoC, or at least, that’s my hope.” Competition keeping Google in check Publishers and industry execs note that Google’s announcement came from its Google Ad Products and not the Chromium team, which develops projects related to its popular browser. Any attempt by the Chromium team to block solutions by LiveRamp, The Trade Desk or ID5 would likely lead to anticompetitive lawsuits. And the U.K. markets watchdog Competition and Markets Authority is already circling. Google is trying to compete on privacy, and why not? It’s not the first to do so, points out Bojana Bellamy, president of global privacy think tank Centre for Information Policy Leadership. “One regulator’s dream: privacy, can be another regulator's nightmare: competition," said Bellamy. "But they need to work together and engage in tri-party discussions with Google. We always ask the big tech to be accountable, responsible, to implement privacy by design.” Publishers are more suspicious. "Google isn’t doing this to undermine its market position," said Bartlett. "It thinks it can use its dominant market position to forge a new way forward." Nonetheless, a more fragmented ecosystem is not ideal. But, Bellamy points out, killing cookies and related identifiers impacts Google’s bottom line. Google “will have to change [its] current practices, invest in new technology and processes and change the direction," she said.

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Hey Google! So, What's Next for Publishers?

Market dominance leaves few alternatives

Lucinda Southern

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